Minutes - 2009/01/26 - Laserfiche WebLink

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Mounds View City Council January 26, 2009 Regular Meeting Page 2 perfect economic storm. He advised that everything will be on the "table" for budget cuts. Representative Tillberry expressed concern that previous cuts have reduced the number of auditors available who assure deposits are made and finances correctly handled. On a City level, he indicated that State mandates may be addressed and input from the City is needed because no one can solve the budget deficit on their own. Council Member Stigney stated it would provide some balance for loss of LGA if cities did not have to pay sales tax on purchases. Senator Betzold reviewed the history of LGA and requiring cities to pay sales tax, noting that not requiring cities to pay sales tax would "make the hole deeper" so he does not see that happening. Council Member Stigney stated since LGA has been eliminated, he would like the Legislature to readdress the big picture. Representative Tillberry stated he will be meeting with the Chair of Property Tax Division, which may be looking at LGA or mandates. Also, related to the K-12 Finance Committee, he has been asked to head up the mandate piece and see what is there. Senator Betzold reviewed the cuts made to address the State's $4.3 billion deficit in 2003, making about $1.3 billion in actual cuts and using budget reserves. With the current budget deficit, the State does not have the tobacco endowment, fees are almost maxed out, and the cuts made in 2003 cannot be cut again. Council Member Gunn asked how far the State will go to assure the Northwest Airline (NWA) jobs remain in Minnesota, noting the unemployment rate predicting up to 10%. Senator Betzold advised Senate hearings were held last week and the Senate Counsel indicated we don't need any legislation to change the law, which required NWA to maintain headquarters in return for the assistance given for their maintenance building in 1990s. However, NWA has gone through bankruptcy, which allows them to not abide by some of the agreements. Clerk-Administrator Ericson stated the City understands the comment about not being able to make the same cuts a second time, noting that Mounds View went through that when LGA was cut. He pointed out that Mounds View will deal with the loss of several hundred thousand dollars in potential lost aid. The City cannot recertify a levy that has already been adopted and has no mechanism to raise funds. He stated it is acknowledged that all need to do their part and maybe levy limits can be eliminated in 2010, or mandates and administrative offenses. Clerk- Administrator Ericson stated cities have their budget in place and if LGA will be lost, need some type of mechanism to recover those funds. Representative Tillberry stated he fully understands what the City is talking about and all are trying to determine how cuts can be made. The concern is that if something is cut in one area, like a program, those people may just be transferred into another program or may end up on unemployment. He advised they have also addressed the issues of "fairness," such as with cities that receive no LGA, and how cuts can be equitable across the system. Senator Betzold referenced Governor Pawlenty's promise to not raise taxes or cut LGA and change in that position when faced with huge deficits in 2003. In addition, many State programs